Problem
Accounting for foreign currency transactions Tassie Ltd is an Australian company with a reporting periods ending on 30 June. During the year ended 30 June 2017, Tassie Ltd purchased goods from Britania Ltd, a company based in London. On 15 March 2017, Tassie Ltd ordered goods of £300 000 from Luca Ltd under FOB London contract. On 11 May, the goods were shipped FOB London and arrived at Tassie Ltd's warehouse on the 2 July 2017. Tassie Ltd paid the £300 000 due to Luca on the 14 August 2017. Applicable exchange rates are as follows. 15 March 2017 A$1.00 = 37p 11 May 2017 A$1.00 = 41p 30 June 2017 A$1.00 = 43p 2 July 2017 A$1.00 = 42p 14 August 2017 A$1.00 = 39p Required: (1) In accordance with AASB 121, prepare the relevant journal entries of Tassie Ltd for the years ending 30 June 2017 and 30 June 2018. (2) Assuming that, instead of goods, Tassie Ltd was purchasing plant and equipment, which is installed ready for use on 15 July 2017 when the rate is still A$1.00=42p. Prepare relevant journal entries of Tassie Ltd for the years ending 30 June 2017 and 30 June 2018.